It is important for you to know the difference between a business opportunity, a dealership and a home business program. That is because all three operate differently and each produce different results. If you don’t know the difference, you will wind up feeling disappointed because your goal might not be to spend much out-of-pocket money for start-up costs and a business opportunity normally requires a larger start-up cost than you may realize.
What is a Business Opportunity?
Let’s start by examining what a business opportunity “normally” is. It is an opportunity for you to “buy” into a business. That normally means that you will have to purchase some inventory, or commit to a regular monthly purchase of the product the company sells. For instance, VendStar (www.vendstar.com) provides a business opportunity where you purchase vending machines filled with their product (M&M’s, peanuts, etc.). You make your money back when you place the vending machines in high-traffic areas and people use them.
Companies set up business opportunities like this for several reasons. The main obvious reason is that the company is assured of selling their product, including the vending machine they may also manufacture. But the bottom line is you have to put up some money for inventory before you can actually make any money of your own.
Other reasons companies offer business opportunities is to expand their business, increase their name recognition, and market their products in areas they could never reach. For instance, if Jane Doe sells VendStar’s products in Hazard, Kentucky this would be an area that VendStar would normally never reach. Therefore, sales are increased overall.
What is a Dealership?
A dealership is something most of us are familiar with. There is little or no cost involved when you sign up to be a dealer, but you are going to have to lay out some out-of-pocket expense to print, mail and distribute the flyer or sales circular. The whole basis of this method is based upon the premise of the “print and mail” concept. Dealerships are primarily used by companies who sell typesetting, printing, mailing lists, publications and authors of “how-to” materials that are very cheap to reproduce and resell.
Although participating in dealerships has never been my “cup of tea,” there are plenty of people who truly love them regardless of the expense of printing and mailing. They dearly love making copies of flyers, buying a mailing list, stuffing envelopes and hauling everything to the post office. Once they have accomplished this goal, they will wonder to themselves, “Is this the big one where I will make lots of money?” In this light, dealerships are similar to gambling, which is why I personally do not prefer them, although many of you reading this article will disagree.
In a dealership, you make your money when people place an order from one of the flyers you mailed out. The majority of the time, you keep a portion of the money from the order, and send the order and remaining money to the prime source, who fills the customer’s order.
Unfortunately, the people that make money with dealerships are those that can afford to do 1,000’s of mailing a month. To prove this, I have developed many dealerships in the past where I was the prime source. One program I developed back in 1988, the “No Fail Stamp Program” was ran completely honest and I had over 7,000 dealers. Out of those 7,000, the only people who made money were publishers mailing 15,000 or more tabloids a month. Those who only mailed 100 or 200 a month never earned one single commission, and naturally they dropped out within a month or two.
What is a Home Business Program?
A home business program is probably the least known of the previous methods we have already uncovered. In fact, you may not even really know what one is because they are rare gems to find. A true home business program is one in which you resell a product for the company but there is virtually NO start-up costs. This method will certainly appeal to a greater percentage of people and prompt more people to join. Although not everyone signing up will participate in the program, there will still be more active participants due to the larger number of people originally signing up.
You should immediately be able to see the difference now between a “home business program” and a “business opportunity” as discussed previously. The difference is the cost to start-up your business. In a business opportunity, a company forces you to purchase their product so you can resell it. A home business program does not require you to commit to purchasing their product before you resell it. Therefore, with a home business program, you have virtually no up-front, out-of-pocket costs.
Why would a company take a chance and offer a method like this for selling their products versus the business opportunity method? Most companies probably wouldn’t; but the home business program method works excellent for companies who sell service products.
For instance, my company offers a home business program that costs absolutely nothing to sign-up. If you decide to participate, you sell our product (Client Intake Forms) for $200, $300 or $400. Our paralegals prepare the actual bankruptcy petition for only $99.95 and you keep the rest of the money as pure profit! Within the first week of introducing the home business program, 135 people signed up. A few months after developing the program, my business has dramatically increased so the results of using this method are almost immediate.
How do you locate true home business opportunities? The internet is filled with them.
The final topic we have not covered in this article is the out-of-pocket cost you will spend in advertising the product or service you are selling so you can attract new customers. This is probably the only time you will have to endure some patience in the start of any new business because it takes time to get your first customer. However, I have found the cheapest and quickest way to product results is with classified advertising, including online sites such as Craigslist. Did you know that you can advertise in 1,000’s of newspapers across the country for as little as $5.00 for a 15-word ad to 20,000 or more circulation?
Try these out. Place ads directly online and instantly see your ad published within days not months. These places are fantastic for testing your ads, experimenting with your ad headline, determining what price is best to sell at, etc.
I hope this article has helped you to put things in better perspective, or to point out something that you already knew but had forgotten about. In business, there are millions of different combinations of marketing methods employed by companies. The trick is not to be disappointed when something doesn’t work out for you personally. Perhaps you had a different goal in mind than the company had, and the reason the opportunity, dealership or program didn’t work for you was the lack of understanding the method in which the company chose to market their products. I wish you my best.
Category: Start a Home Business